Leaders of the Darul Uloom Deoband seminary, one of the most influential in the world, had earlier called for Sir Salman to be barred from India to stop him in appearing at the festival in protest over his controversial novel The Satanic Verses.

They said the author could never be forgiven for his narrator's claim blasphemous that disputed verses on the Koran were disclosed by the Archangel Gabriel.

The novel provoked anger throughout the Muslim world when it was published in 1988 and was also banned in India where the secular government feared it would cause communal tensions. Iran's then spiritual leader Ayatollah Khomeini issued a fatwa calling for him to be killed.

The threat was later lifted and the author eventually emerged from hiding and heavy security to return to normality, but according to Indian officials the controversy over his visit has brought a new threat to his life.

Shortly after the five-day festival opened in Jaipur on Friday one of its producers read a statement on behalf of Sir Salman in which he explained why he would not now be appearing after all.

"I have now been informed by intelligence sources in Maharashtra and Rajasthan that paid assassins from the Mumbai underworld may be on their way to Jaipur to eliminate me.

"While I have some doubts as to the accuracy of this intelligence, it would be irresponsible of me to come to the festival in such circumstances."

Security for the popular festival, which attracts thousands of visitors, had already been escalated following the threat of protests.

News of his withdrawal brought anger from fellow authors at the festival and speculation that the warnings may have motivated by political considerations in Uttar Pradesh where the ruling Congress party is campaigning for Muslim votes.

Festival officials sought to quell a protest at Jaipur's Diggi Palace on Friday when leading British-Indian author Hari Kunzru and a leading Indian academic announced they would be reading from the Satanic Verses in defiance of "bigots".

"The absence of Rushdie from the Jaipur Literature Festival is a stain onIndia's international reputation," Hari Kunzru said on Twitter. "Assassins should not be allowed to stifle writers," said Amitava Kumar. Festival officials however asked them not to read from the Satanic Verses.

One of the festival's directors, the British author William Dalrymple, said Sir Salman would still take part but via a video link.

"The reality of Rushdie's writings are completely different from the way they have been cartooned and caricatured," he said.